| In real estate transactions, there needs to be a way | | | | Closing date |
| for the buyer to guarantee that the seller will indeed | | | | If there is an earnest money deposit, the escrow |
| pay the funds agreed upon. Similarly, the buyer needs | | | | agent will place it into a separate escrow account. |
| a way to guarantee that, once his or her deposit is | | | | The agent will then order a title search. In addition to |
| paid, the seller will hand over the deed or title to the | | | | you and the buyer, the lender will receive a report of |
| property. This is where escrow comes into play. | | | | this information. Any loan and interest fees charged |
| What is Escrow? | | | | by the lender will be included in the escrow |
| As a for sale by owner home seller, you are | | | | instructions. |
| responsible for setting up, or opening, the escrow | | | | Choosing an Escrow Agent |
| account. The escrow agent will be a third-party who | | | | When you are choosing an escrow agent, there are |
| is responsible for holding the title or deed to the | | | | several factors that you should take into |
| property as well as earnest deposits made on behalf | | | | consideration. If you are working with a real estate |
| of the buyer. The purpose of an escrow is to hold | | | | attorney, he or she might be able to act as the |
| legal documents and money until certain conditions, | | | | escrow agent as well. In any case, here are some |
| agreed by you and the buyer. The escrow agent will | | | | tips on choosing an escrow agent. |
| hold money and property ownership until these | | | | Choose a reputable escrow agent or company. |
| conditions have been met. | | | | Friends or family who have recently sold property |
| In many for sale by owner transactions, both the | | | | are good places to get recommendations for an |
| seller and the buyer open escrow accounts. There is | | | | escrow agent. Ask the references about their |
| no standard way of one or the other. Rather, it | | | | experience with the agent. Did he return phone calls |
| depends on what you and the buyer agree. | | | | in a timely manner? Was he courteous and |
| To process your escrow instructions accordingly, the | | | | professional? Was he knowledgeable? |
| escrow agent might ask you for several pieces of | | | | Choose an escrow that has experience in for sale by |
| information. You might not have all the information | | | | owner housing transactions. It is best to choose an |
| available immediately, but you should get it to the | | | | escrow that has previously worked in a transaction in |
| escrow agent as soon as possible. This information | | | | which the seller did not work with a real estate |
| includes, but is not limited, to the following: | | | | agent. |
| Your (the seller) name and address | | | | Choose an escrow with reasonable rates. Since rates |
| Buyers name and address | | | | vary from one company to the next, it is a good |
| Purchase agreement | | | | practice top shop around to get an idea of the rates |
| Amount of deposit | | | | that are available. |
| Buyers insurance agent | | | | After talking with several escrow agents and getting |
| Lenders or other financing partys information | | | | a feel for their professionalism, experience, and rates, |
| Termite report information | | | | you are prepared to make an educated decision. |